Extreme Cold & Winter Weather | Update #4 - Department of Energy

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Extreme Cold & Winter Weather | Update #4 - Department of Energy
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               Extreme Cold & Winter Weather | Update #4
   REPORT TIME & DATE:       12:00 PM EST| Friday, February 19, 2021
   REPORT DISTRIBUTION:      Public

                                       EXECUTIVE SUMMARY
An arctic air mass is beginning to recede after impacting the Central United States, bringing snow, ice,
and extreme cold temperatures from the Canadian border as far south as Texas, causing record winter
power demand and impacting power generation. While emergency conditions remain in effect on Friday,
the Electric Reliability Council of Texas (ERCOT) has been able to balance generation and load to restore
the majority of customers who were under controlled power outages across Texas since early Monday.
The Southwest Power Pool (SPP) and the Midcontinent Independent System Operator (MISO) also
implemented controlled outages on both Monday and Tuesday. The arctic air mass is expected to
continue impacting the region through the remainder of the week, but temperatures are expected to
begin to moderate throughout today and the weekend.

Electricity Sector Summary
  • As of 11:00 AM EST, February 19, ERCOT downgraded their status to Energy Emergency Alert (EEA)
      Level 1, Conservation Needed, as operating reserve margins continue to improve. ERCOT
      downgraded their status to EEA 2 at 10:00 AM EST and they expect to come out of emergency
      conditions later this morning. Generation resources continue to be strained due to offline units
      tripped by cold weather, natural gas supply curtailments, and some wind power generation
      outages. Enough generation capacity was returned to service in Texas to restore the customers that
      were impacted by controlled outages.
          o As of 9:30 AM EST, there were about 189,000 power outages across Texas. This is down
              from more than 4 million customers without power on the afternoon of February 16.
          o Although some customers remain out of power due to associated issues from the controlled
              power outages, most of the remaining customers are without power in Texas and Louisiana
              due to damaged infrastructure from the ongoing winter weather.
  • SPP has restored their controlled outages and downgraded their status to EEA Level 1, but they still
      have concern about sustaining the required Contingency Reserves. MISO has issued a Maximum
      Generation Alert through 4 PM EST, February 20.

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Extreme Cold & Winter Weather | Update #4 - Department of Energy
SITUATION UPDATE                                TLP:WHITE                               February 19, 2021

Natural Gas Sector Summary
   • Extreme cold temperatures have led to sharp increases in gas demands for home heating and
       electricity generation across much of the Central United States. At the same time, the cold has
       led to well freeze-offs and natural gas processing plant outages that have caused supply
       disruptions in several producing areas, especially in the U.S. South Central region (TX, OK, KS, LA,
       AR, MS, AL), which typically accounts for approximately 20-25% of total U.S. gas production.

 Petroleum Sector Summary
  • As of February 19, full or near-full refinery shutdowns have been reported at several refineries
      accounting for about 20% of total U.S. refinery capacity. The worst impacts are primarily
      concentrated in the Texas Gulf Coast region, but refinery issues extend across several states.

                                             DOE ACTIONS
 DOE ENERGY RESPONSE ORGANIZATION (ERO): ACTIVATED: Enhanced Watch
  • DOE is coordinating with industry, interagency, and state partners to provide situational
     awareness and support restoration efforts.
  • DOE is holding daily unity of effort calls with electricity and oil and natural gas partners and is in
     regular contact with the North American Electric Reliability Corporation.
  • Following a formal petition from ERCOT on February 14, the Acting Secretary of Energy issued an
     emergency order pursuant to section 202(c) of the Federal Power Act to authorize the dispatch of
     additional generation units in the ERCOT region to help ensure reliability. This allows ERCOT to
     dispatch generation units they deem necessary to meet electricity demand from February 14
     through February 19, 2021 even if they are in exceedance of limits for sulfur dioxide, nitrogen
     oxide, mercury, and carbon monoxide emissions, as well as wastewater release limits. A copy of
     the order and additional information can found at:
     https://www.energy.gov/oe/downloads/federal-power-act-section-202c-ercot-february-2021.

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Extreme Cold & Winter Weather | Update #4 - Department of Energy
SITUATION UPDATE                                  TLP:WHITE                          February 19, 2021

                                               ELECTRICITY SECTOR
POWER OUTAGES
  • As of 9:30 AM EST, there were approximately 263,000 power outages across Texas and Louisiana,
     including 189,000 outages in Texas.

                                Texas and Louisiana Customer Power Outages
                                        as of 9:30 AM EST 02/19/2021
                                          % of State Without                                    % Restored
              State   Current Outages                               Peak Outages
                                                 Power                                          from Peak
         Texas*           189,071                 1.6%                4,893,204                    96%
        Louisiana          73,501                  3%                  211,496                     65%
          Total           262,572                   -                     -                         -
*Total outages, including both controlled outages and storm-related outages.
                       Outage Chart
            5.0                                                                Outage Map
 Millions

            4.5
            4.0
            3.5
            3.0
            2.5
            2.0
            1.5
            1.0
            0.5
            0.0
                  Feb-15 3 AM

                  Feb-16 3 AM
                         Date

                  Feb-15 9 AM

                  Feb-16 9 AM

                  Feb-17 3 AM
                  Feb-17 9 AM

                  Feb-18 3 AM
                  Feb-18 9 AM

                  Feb-19 3 AM
                  Feb-15 3 PM

                  Feb-16 3 PM
                  Feb-14 9 PM

                  Feb-15 9 PM

                  Feb-16 9 PM

                  Feb-17 3 PM
                  Feb-17 9 PM

                  Feb-18 3 PM
                  Feb-18 9 PM

                      Texas             Louisiana

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Extreme Cold & Winter Weather | Update #4 - Department of Energy
SITUATION UPDATE                             TLP:WHITE                            February 19, 2021

ELECTRICITY OVERVIEW

•   ERCOT: As of 11:00 AM EST on February 19, ERCOT downgraded their status to EEA Level 1,
    Conservation Needed, as operating reserve margins continue to improve. ERCOT had downgraded
    their status from EEA 3 to EEA 2 at 10:00 AM EST and expects to come out of emergency conditions
    later this morning. There were no additional outages overnight.
•   SPP: At 7:25 PM EST on February 18, SPP declared an Energy Emergency Alert EEA Level 1. All
    available generation resources were committed to meet forecasted electricity demand.
•   MISO: MISO has issued a Maximum Generation Alert for its South Region through 4 PM EST on
    February 20. MISO has also extended its Conservative Operations and Cold Weather Alert through
    February 20 at 4 PM EST.

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SITUATION UPDATE                              TLP:WHITE                              February 19, 2021

REGIONAL DETAILS

OVERVIEW
•   As of 11:00 AM EST on February 19, ERCOT
    has moved to EEALevel 1, Conservation
    Needed, and expects to come out of
    emergency conditions later this morning.
•   Customers outages remaining as of the
    morning of February 19 are likely due to ice
    storm damage on the distribution system,
    emergency load shed that needs to be
    restored manually, or large industrial facilities
    that voluntarily went offline for conservation.
•   ERCOT is the independent system operator
    for the state of Texas, serving about 26
    million people and about 90% of the state’s
    electric load. ERCOT operates largely independently from the rest of country and is not subject to
    federal oversight.

GENERATION
• Generation capacity offline: As of 8:30 AM EST on February 19, ERCOT reported that
   approximately 34,000 MW of generation capacity remained on forced outage due to the winter
   weather. Of this, nearly 20,000 MW is thermal generation, and the rest was wind and solar.
• Actual generation in January 2021: For context, from January 1-31, 2021, ERCOT’s actual
   generation included:
     o Gas (combined cycle): 10,744 GWh, 35%
     o Wind: 7,702 GWh, 25%
     o Coal: 6,803 GWh, 22%
     o Nuclear: 3,801 GWh, 12%
     o Solar: 732 GWh, 2%
          o Combined thermal generation (Natural Gas, Gas, Coal, Nuclear) was about 72%
          o Combined renewable generation (Wind, Solar) was about 27%

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SITUATION UPDATE                               TLP:WHITE                             February 19, 2021

   •   Ongoing generation issues: Low supply of natural gas due to well “freeze offs,” low gas
       pressure, and frozen instrumentation, as well as lower-than-normal solar generation due to
       heavy cloud cover, and limited wind generation due to icing on the turbines constrained the
       electricity supply.

                                      Source: EIA Hourly Electric Grid Monitor

Federal action: On the evening of February 14, the Acting Secretary of Energy issued an emergency
order pursuant to section 202(c) of the Federal Power Act to authorize the dispatch of additional
generation units in the ERCOT region to help ensure reliability. This allows ERCOT to dispatch
generation units they deem necessary to meet electricity demand from February 14 through
February 19, 2021 even if they are in exceedance of limits for sulfur dioxide, nitrogen oxide, mercury,
and carbon monoxide emissions, as well as wastewater release limits.

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SITUATION UPDATE                           TLP:WHITE                           February 19, 2021

MISO
OVERVIEW
• MISO declared a Maximum Generation Alert at
  9:30 EST on February 17 through February 20 at
  4 PM EST with no further load shedding, after
  several rounds of Maximum Generation
  Emergency Event Step 2c between February 15-
  17 when they directed utilities to shed load in
  their Central, South, and Western regions due to
  extreme winter weather and temperature-
  related generation and transmission failures.
• MISO has extended its Conservative Operations
  and Cold Weather Alert through February 20 at 4
  PM EST.
• MISO is the independent system operator and regional transmission organization for much of the
  Midwest, with 15 U.S. member states, including a small portion of Texas not covered by ERCOT.

 SPP
OVERVIEW
• At 7:25 PM EST on February 18, SPP declared an
  EEA Level 1. All available generation resources
  were committed to meet forecasted electricity
  demand.
• SPP has 14 member states in the Central and
  Western United States and performs contract
  reliability coordination services in three
  additional states.

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SITUATION UPDATE                               TLP:WHITE                               February 19, 2021

                                       NATURAL GAS SECTOR
NATURAL GAS SUMMARY
Extreme cold temperatures have led to sharp increases in gas demands for home heating and
electricity generation across much of the Central United States. At the same time, the cold has led to
well freeze-offs and natural gas processing plant outages that have caused supply disruptions in several
producing areas, especially in the U.S. South Central region (TX, OK, KS, LA, AR, MS, AL), which typically
accounts for approximately 20-25% of total U.S. gas production.

NATURAL GAS PRODUCTION
  • Wellhead freeze-offs due to below freezing temperatures have caused producers to cut back
     natural gas production in the South-Central United States, including in the Permian Basin in
     Texas and New Mexico, the Cana Woodford in Oklahoma, and the Denver-Julesburg in
     Colorado.
  • Although production losses due to freeze-offs are temporary, output takes time to return to
     normal levels, and the cumulative reduction over several days could be substantial.

NATURAL GAS PROCESSING PLANTS
  • Some natural gas processing plants and compressor stations across Texas have reportedly shut-
     in due to weather conditions.

NATURAL GAS STORAGE
  • Suppliers are compensating for lost output and responding to the surge in gas demand and
     prices by withdrawing gas from storage facilities.
  • This week ending February 19th ,2021 is projected to have the largest withdrawal from storage
     in the history of the South Central Region
NATURAL GAS STOCKS
  • Natural gas stocks in the U.S. South Central region stood at 826 Bc/f on February 12, 3.0%
     below the five-year average for this time of year. Natural gas stocks for the week ending
     February 19 are expected be 15%-20% lower than this week for the South-Central Region, due
     to this week’s significant draws.
  • According to EIA’s Form 191 data, Texas has 30 active natural gas storage facilities.

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SITUATION UPDATE                                  TLP:WHITE                           February 19, 2021

                    Source: EIA
                    South Central includes Alabama, Arkansas, Kansas, Louisiana,
                    Mississippi, Oklahoma, and Texas

NATURAL GAS PIPELINES

   •   Natural gas pipelines across the affected area have implemented severe/winter weather
       procedures and many lines have issued operational flow orders.

NATURAL GAS UTILITIES

   •   On February 12, the Texas Railroad Commission (TRC) issued an emergency order temporarily
       prioritizing natural gas deliveries to natural gas utilities for residences, hospitals, schools,
       churches, and other human needs customers.
LNG TERMINALS

   •   On February 17, Texas Governor Greg Abbott issued a letter to the TRC directing “all sourced
       natural gas be made available for sale to local power generation opportunities before leaving
       the State of Texas.” Following the letter from Governor Abbott, the TRCissued Notice to
       Operators.
   •   Texas Governor Greg Abbott has asked LNG export terminals to dial back operations.

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SITUATION UPDATE                              TLP:WHITE                                           February 19, 2021

                                           PETROLEUM SECTOR
PETROLEUM SECTOR SUMMARY
Extreme cold temperatures and power outages have forced operators to shut down refineries in the
U.S. Gulf Coast region. Additionally, extreme cold temperatures and well freeze-offs have led to
production outages in producing areas.
REFINERIES
   • As of February 19, refinery shutdowns, rate reductions, or process unit outages have been
      reported at refineries representing approximately 5.7 million barrels per day (b/d) of refinery
      capacity. Full or near-full refinery shutdowns have been reported several refineries, accounting
      for approximately 20% of total U.S. refinery capacity. The most severe impacts have been
      reported in the Texas Gulf Coast region.
PORTS
   • Operations in the Houston Ship Channel resumed at 10:30 AM EST on February 17.

OIL STOCKS
    • Crude oil stocks in the Gulf Coast                  Crude Oil Stocks in U.S. excluding SPR
                                                                     (million barrels)
       (PADD 3) averaged 249 million
                                            320
       barrels for the week ending
       February 5, 5.0% above the five-     300
       year average for this time of        280
       year.
                                            260

                                            240

                                            220

                                            200
                                                  Jan   Feb Mar   Apr    May   Jun   Jul   Aug   Sep   Oct   Nov   Dec
                                                             Range          5-YrEIA
                                                                        Source: Avg.Weekly2020
                                                                                           Petroleum 2021
                                                                                                     Status Report

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SITUATION UPDATE                                TLP:WHITE                               February 19, 2021

                             EMERGENCY DECLARATIONS & WAIVERS
EMERGENCY DECLARATIONS
To provide vital supplies and transportation services to a disaster area in the United States, emergency
declarations may be issued by the President, Governors of States, or the Federal Motor Carrier Safety
Administration (FMCSA). These declarations trigger the temporary suspension of certain Federal safety
regulations, including Hours of Service, for motor carriers and drivers engaged in specific aspects of the
emergency relief effort. See 49 CFR 390.23 for the actual emergency regulation.

        Emergency Declarations and HOS Waivers for TX, OK, LA as of 10:30 AM EST 02/19/2021
                                                                    Effective Dates
   State/Territory                    Details                                            Status
                                                                  Start         End
                           HHS Public Health Emergency            2/17       Continuing   Active
                        Texas Department of Public Safety
                        Emergency Notice – Assistance for
                                                                  2/10          2/15     Expired
        Texas         delivery of Propane and Home Heating
                                        Oils
                          Federal Emergency Declaration           2/11       Continuing   Active
                            State Disaster Declaration            2/12       Continuing   Active
                          Federal Emergency Declaration           2/18       Continuing   Active
                      Emergency Order- Implementation of
      Louisiana                                                   2/15          2/20      Active
                           Emergency Gas Shortage Plan
                                State of Emergency                2/11          3/12      Active
                                    HOS Waiver                    2/10          3/12      Active
     Oklahoma             Federal Emergency Declaration           2/18       Continuing   Active
                                State of Emergency                2/12       Continuing   Active

      Emergency Declarations and HOS Waivers for All Other States as of 10:30 AM EST 02/19/2021
                                                                       Effective Dates
   State/Territory                      Details                                            Status
                                                                   Start         End
                          Regional Emergency Declaration
                      (AR, CT, DE, DC, IL, ID, IA, KS, KY, LA, MD,
     Multi-State       MA, MN, MO, MS, MT, NE, NJ, NY, NM,         2/17          3/4       Active
                       NC, ND, OH, OK, OR, PA, RI, SD, TN, TX,
                                  VA, WV, WI, WY)
       Montana                      HOS Waiver                     2/12          3/14      Active
    North Dakota                    HOS Waiver                     2/12          3/14      Active
     Connecticut                    HOS Waiver                     2/13          2/19      Active
                         New Mexico Department of Public
    New Mexico                                                     2/15          2/20      Active
                      Safety- Declaration of Emergency Notice

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SITUATION UPDATE                                        TLP:WHITE                      February 19, 2021

                              State of Emergency- Affecting Eight
                            Counties in Northern & North Central
    West Virginia                                                      2/16     3/18            Active
                           WV. State of Preparedness for the rest of
                                            the state.
       Virginia                        State of Emergency              2/11     3/13            Active
                            State of Emergency in the Willamette
       Oregon                                                          2/13   Continuing        Active
                                              Valley
                           Declaration of Transportation Emergency
     Maryland               and Commercial Motor Vehicle Safety        2/19     2/23         Preliminary
                                       Regulation Waiver
                              Executive Order- Emergency Motor
      Nebraska                 Carrier Relief Due to Extreme Cold      2/15     2/19            Active
                                          Temperatures
     New York                              HOS Waiver                  2/17      3/1            Active
                            Illinois Department of Transportation-
       Illinois                                                        2/16     2/20            Active
                                   Declaration of Emergency.
       Iowa                       State of Disaster Emergency          2/15     3/17            Active
    Pennsylvania                           HOS Waiver                  2/27     2/28            Active
     Tennessee                               HOS Waiver                2/16     2/26            Active
                              Kentucky Transportation Cabinet
                           Declaration of Emergency- Assistance for
      Kentucky                                                         2/11     2/21            Active
                              power restoration and delivery of
                             gasoline, propane, and diesel fuels
                                          HOS Waiver                   2/14     2/21            Active
     Mississippi
                                     State of Emergency                2/14     2/21            Active
                                          HOS Waiver                   2/14     3/16            Active
      Alabama
                                     State of Emergency                2/14   Continuing        Active
Sources: State government, White House, and websites.

•   On February 15, the Texas Commission on Environmental Quality was granted approval to
    temporarily suspend certain emissions requirements to the extent that compliance with
    requirements prevent, hinder, or delay necessary action in coping with this disaster. This
    suspension provides relief of natural gas generation and distribution emissions requirements. The
    suspension is in effect until terminated by the Office of the Governor of until the Texas disaster
    declaration is lifted or expires.

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